EBRD outlines new approach to financial market development

The European Bank for Reconstruction and Development (EBRD) has published its new Approach to Financial Market Development, underlining the central role of deep and resilient domestic financial markets in delivering the Bank’s transition objectives, according to a press release issued on 11 June 2026. The paper aligns the Bank’s financial market work with its Strategic and Capital Framework (SCF) 2026-30. It identifies financial markets as a critical pillar of well-functioning market economies. It also sets out the Bank’s high-level objectives in this field. The document explains how the EBRD helps build local financial markets across its countries of operation.

Founded in 1991, the EBRD plays a significant role in local financial market development across its regions. It does so through a combination of investment, technical assistance, and policy dialogue. The new paper draws on more than three decades of experience. It also incorporates lessons learned through crises and policy responses. The Approach emphasizes that financial markets help drive economic growth by efficiently pricing and allocating capital.

The Approach highlights the importance of domestic markets in strengthening economic governance. It notes their wide-ranging impact, from improving monetary policy transmission and financial risk management to increasing transparency and corporate governance through the discipline imposed by public markets. Deeper local financial markets also strengthen economic resilience by increasing the use of local currencies. They reduce reliance on foreign exchange inflows. This supports the EBRD’s ability to expand local currency financing through active participation in local markets.

Developing local markets is equally crucial for mobilizing long-term private capital and diversifying funding sources. They provide instruments for private investors to invest alongside the EBRD. They also help market participants manage financial risks, supporting the wider multilateral development bank mobilization agenda.

Alex Pivovarsky, the EBRD’s Director for Capital and Financial Markets Development, said: “Deepening financial markets is a system level priority for the EBRD. Our new Approach to Financial Market Development builds on our decades of experience across our countries of operation, and we look forward to engaging with all our partners to help implement it.”

Aude Pacatte, the EBRD’s Director for Local Currency Portfolio Management in the Bank’s Treasury, added that by combining policy work with investments and active participation in local currency markets, the EBRD is uniquely positioned to support its countries. She noted that this combination helps address barriers that constrain market development. It also contributes to policy effectiveness, economic resilience, and private capital mobilization at scale. The Approach reinforces the EBRD’s commitment under its SCF 2026-30. It positions domestic financial markets as central to the Bank’s transition objectives.